18/10/2016 - 16:01

Pink diamonds in your super

18/10/2016 - 16:01

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Pink diamonds in your super
David Fardon is expecting local, national and international interest in Linneys latest pink diamonds showcase. Photo: Attila Csaszar

Rare pink diamonds from the Kimberley are emerging as new class of investment asset.

The diamonds, which are only produced at Rio Tinto’s Argyle mine, have typically been used for exclusive, high-end jewellery pieces.

However Linneys chief executive David Fardon said there was increasing demand from investors seeking a safe haven to put their cash during times of global uncertainty, even those with self-managed super funds.

Mr Fardon said Linneys had been manufacturing jewellery with the pink diamonds for more than 30 years, but only recently had investors started to consider them collectible items to add to a diversified portfolio.

“Historically, most people have bought them because they are beautiful, they are special and they are going into an heirloom piece of jewellery for that person or that couple,” Mr Fardon told Business News.

“But what we have seen in recent years is (that) people are now starting to look at them as collectible items, to the point where some people are making them part of their portfolio of investments.

“We’ve got clients that have bought them with a view to passing them on to future generations, but then there are other people who have looked at them as part of their portfolio mix.

“I wouldn’t overstate it, but it’s not as if there’s been just one or two; there have been a lot of people who have done that and they are considering it like a collectible item, just as one might with a piece of art that’s been put aside with a view to its value appreciating over time.”

Later this week, Linneys will launch an exclusive Argyle Pink Diamond showcase, highlighted by a $3 million piece called the Argyle Blossom ring.

In total, around $20 million worth of loose stones and jewellery make up the showcase, which will be offered first to buyers in Perth on Friday, then later this month in Sydney.

The Argyle Blossom ring took hundreds of hours to create. Photo: Attila Csaszar

Mr Fardon said he expected the showcase to create considerable buzz, with all of the stones part of the Argyle Diamond Tender, an annual offering of the best pink diamonds from the Argyle mine.

“We have a lot of local, national and international clients who have sourced pink diamonds from us over the years,” he said.

“What we have seen in recent years is the emerging markets of Asia learning and understanding a lot more around the product and becoming more educated about the rarity and collectability.

“There is consumer interest from highly affluent people.”

The diamonds make up less than 1 per cent of production from the mine, a level of rarity Mr Fardon said was the main contributing factor to significant rises in value over the past 13 years.

“From 2002 to 2015, there has been a price improvement, on average, in the order of 15 per cent per annum,” he said.

“When you compare that to the share market, that’s a pretty good return.”

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